New developments attractive choice for home seekers and investors

New developments attractive choice for home seekers and investors

Buying off-plan is an affordable and convenient option for people hoping to buy property but find themselves priced out of the market because of soaring interest rates and high property prices.

"New developments tend to be more inexpensive than buying established properties," says Careen Mckinon, Developments Manager at MortgageSA South Africa's leading bond originator that places one in five South Africans in their homes. "There is the valuable saving on transfer duties as purchasers are not expected to pay transfer duties and some developers even include registration costs in the price."

"When buying a development 'what you see is what you get'," says Mckinon, "The price of the development is fixed with no hidden costs that could jeopardise your finances such as renovations or legal fees."

New developments require a deposit depending on the project; it can either be a percentage of the purchase price (5% or 10%) or a deposit to secure the unit. The deposit amount can vary from R2000 to R10 000 depending on the developer and buyers have to start paying off the bond on registration of the bond.

New developments cater for a variety of needs which include urban developments as well as suburban cluster developments which appeal to families as they usually offer good security, a village atmosphere and leisure facilities.

New sectional title developments are also helping to accommodate mature buyers, in the form of retirement villages and for those with a particular passion, there are lifestyle estates, aimed at golf and equestrian enthusiasts, private nature reserves and heritage developments.

"There are potential problems when buying off-plan which includes delays in completion leaving some homeowners stranded," warns Mckinon.

"New developments are also geared towards investors planning on renting the property out," says Mckinon. "But, there have been problems with speculators investing in property and not being able to find tenants once the property has been completed.

"It is therefore advisable to research the area and ascertain the level of demand before committing yourself," says Mckinon. "Also, if you have decided to purchase a development with the intention of renting, ensure your budget allows for months when there are no tenants to cover your bond."

The interest in new developments is evident as property websites in South Africa are beginning to include them in their search offering.

Propertygenie.co.za launched its own dedicated development section in December 2007 featuring 40 different new developments. Each development has its own mini-website within the property portal allowing visitors to browse through the different offerings.

"We added new developments onto the website after extensive research last year with various developers," says Johan Strydom, Managing Executive of propertygenie.co.za, South Africa's largest online search property portal that lists over 140 000 properties nationwide.

"The interest is evident as there has been over 17 000 page views in December 2007 and over 20 000 in January 2008," says Strydom.

"Because new developments are bought from a plan, the internet is an ideal vehicle for sourcing and researching properties as home seekers are able to research various locations and properties best suited to their budget and lifestyle," concludes Strydom.

Hello ooba news

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